Patent Law Blog (Patently-O)

Panel Prevents Piling-on of the Period of Patent Protection by Patenting Precursor Product

In re Fujimura (Fed. Cir. 2005) (NONPRECEDENTIAL).

Fujimura’s earlier patent that covers a sintered permanent magnet had expired, but the applicant hoped to obtain a patent on a permanent magnet alloy, a precursor to the sintered permanent magnet.  During prosecution, the examiner rejected the claims of the application on the basis of obviousness-type double patenting.  This rejection was affirmed by the BPAI (Board). 

On appeal, the Court of Appeals for the Federal Circuit affirmed, finding that the applicant was impermissibly attempting to extend patent protection.

Reduced to its essentials, this is a case in which the patentees have attempted to extend the period of patent protection for their invention by claiming a composition that is a direct precursor of the product for which their patent protection has expired. In that setting, the examiner and the Board properly found that the appellants’ new claims are obvious in light of the expired ones, and we therefore affirm.

Affirmed.

Notice -- USPTO Patent Database Temporarily Unavailable

The USPTO has announced that its Web Patent Database, known as PatFT, may be unavailable from 4:00 PM EST on April 1st until 4:00 PM EST on April 2nd due to a planned physical relocation of the USPTO contractor's data center.

CAFC: No Disclaimer of Claim Scope When Patentee Makes Contradictory Statements.

Outlast Technologies v. Frisby Technologies (Fed. Cir. 2005)(Nonprecedential).

Most of you arrived at this post looking for information on patents on Frisbee discs and disc golf.  Unfortunately this is not a Frisbee case.  

However, it does involve temperature-resistant, phase changing materials that resist temperature change by changing between their solid and liquid state. (Remember latent heat from physics 101).

After claim construction, the district court awarded summary judgment of noninfringement to the defendant Frisby.  Specifically, the court found that the patentee had, during prosecution, clearly disclaimed certain ‘impregnated materials’ from the claim scope.  On Rule 54(b) certified appeal, Outlast argued for an alternative claim construction.

The Appellate Panel found that the district court had erred by finding disclaimer.  The rule, of course, is that a disclaimer must be unequivocal and unambiguous.  In this case, the patentee made one statement that is easily read as a disclaimer, but also made another statement that tends to contradict a disclaimer. 

The Panel found that such contradictory statements are ambiguous of the patentee’s desire to disclaim the subject matter, and thus cannot serve as such a disclaimer.

These seemingly contradictory statements do not unequivocally or unambiguously disclaim articles in which the microcapsules are impregnated within the interstices of the substrate. On the contrary, such contradictory statements are indicative of ambiguity.

The court remanded for a determination of infringement under its newly constructed claim construction using an ordinary meaning approach.

March 2005 Report on New Academic Research

Each month I post a note discussing new research from the academic side of patent law.  This March edition includes three great articles that relate to either legislative changes (prior use statute, post grant opposition) or upcoming court decisions (Phillips claim construction case).  Feel free to e-mail suggestions for April’s edition.

1. Tom Fairhall and Paul Churilla, Prior Use of Trade Secrets and the Intersection with Patent Law, 14 Fed. Cir. Bar J. 455.  Fairhall and Churilla present a timely article on prior use rights that notes how the current prior use statute (35 USC 273) does not provide the scope necessary to truly protect a prior user’s expectations or investments.  The article is quite timely because FTC proposals to expand the statutory prior use rights is gaining some teeth in the patent community and on the Hill.
2. Mark Lemley, The Changing Meaning of Patent Claim Terms, available at SSRN.  Professor Lemley’s article is also timely — he discusses at what particular point in time should the meaning of claim terms be fixed.  This is important because the ordinary meaning of terms in the English language change over time.  The major temporal candidates are (i) at the time of the invention (currently used for novelty and nonobviousness); (ii) at the time the application was filed (currently used for enablement or written description); (iii) a the time the patent issues (currently used for means-plus-function claim construction); and (iv) at the time of the infringement (at least some times used to determine infringement).  Lemley agrees that each candidate has a sound legal foundation.  However, he argues that the best approach moving forward is to fix the meaning at the time the patent application is first filed.
3. Jay Kesan and Andres Gallo, Why ‘Bad’ Patents Survive in the Market, available at SSRN. The professors provide a game theory model to show how would-be invalid patents can survive and be valuable in the marketplace.  Essentially, the transaction costs make it difficult to mount an effective challenge to improperly granted patents.  Their work will serve as the theoretical basis any proposed post-grant opposition procedures.  Specifically, the authors “conclude that a low-cost, post-grant opposition process based primarily on written submissions within a limited estoppel effect . . . will serve as an effective instrument for improving the quality of patents that are issued and enforced.”

Metabolite Labs versus LabCorp -- Request for Certiorari.

The Metabolite Labs case is procedurally interesting because the Supreme Court appears to be focused in a question that is quite different from the one raised by Metabolite in its petition for certiorari.  From a practical standpoint, this case has the potential to once again shatter our current notion of patentable subject matter.

In February, the Court invited the Solicitor General to file a brief expressing the views of the United States on the question of whether a medical diagnosis method patent is invalid as non-patentable subject matter under Diamond v. Diehr, 450 U.S. 175, 185 (1981) (holding that one cannot patent laws of nature, natural phenomena, and abstract ideas).  The patent at issue claims a method of detecting a vitamin deficiency in a human body by using a device to determine whether there is an elevated amino acid level.

The court expressed its interest in the patentability question at a point that was too late for amicus to file briefs on the issue, however, some parties have been lobbying the office of the Solicitor General to submit a brief in their favor. The Public Patent Foundation, for instance, has issued a statement outlining its lobbying efforts asking the government to support the proposition that the method is unpatentable and invalid. Of course, to my knowledge, PubPat has never been publicly in favor of the validity of any patent. 

In the opinion below, the CAFC (Rader, J.) affirmed jury verdict of indirect infringement and breach of contract, and affirmed the district court's award of over $8 million in damages to Metabolite (including damages for willfulness).  The dissent (Schall, J.) argued that claim interpretation had been mishandled. Metabolite Laboratories, Inc. v. Laboratory Corp. of America Holdings, dba as LabCorp., 370 F.3d 1354 (Fed. Cir. 2004) (read my summary).  The question that the High Court is now considering does not appear to have even been addressed by the CAFC decision.  The Court's docket shows that the case has already been distributed for conference five times since January 1, 2005.  

The SG is expected to file a brief in the case.  However, even with SG support, the court is still unlikely to take this one up.

For general information, Professor Eileen Kane's article on the patentability of Genes and DNA provides an excellent analysis of issues surrounding patentable subject matter. Kane argues that the genetic code should be characterized as a law of nature. Available at SSRN, 71 Tennessee Law Review 707.

 

Court Agrees that Sony PlayStation Infringes Immersion Patent

Brandon Rash at the EEJD blog provides info on the most recent win for Immersion technology.  Sony has been ordered by the Court to pay $90 million and halt to PlayStation sales in the United States for violating Immersion's patents on "tactiley responsive" technology. Today’s ruling comes in the wake of last September’s jury verdict of infringement.  Microsoft was a named defendant, but settled prior to trial.

The permanent injunction is stayed pending appeal to the Federal Circuit. In her decision to issue the stay, Judge Claudia Wilken of the Northern District of California determined that four factors weighed in Sony’s favor: (i) the strength of Sony's showing that it is likely to succeed on the merits of its appeal, (ii) whether Sony will be irreparably injured absent a stay, (iii) whether the stay will substantially injure Immersion, and (iv) where the public interest lies. Following Standard Havens Products, 897 F.2d 511, 512 (Fed. Cir. 1990).  “The Court finds that on balance, these factors weigh in favor of granting a stay.”

Here are the case documents:

• Judgment (7 KB)
• Findings of Fact and Law Regarding Inequitable Conduct Defense (36 KB)
• Order Granting Motion to Dismiss Third Party Cross Claims (16 KB)
• Order Entering Permanent Injunction and Granting Motion to Stay Injunction Pending Appeal (9 KB)

CAFC: Indefiniteness Issues Overcome by Defining Terms According to Goal of the Invention

Howmedica Osteonics v. Tranquil Prospects (Fed. Cir. 2005).

by Dennis Crouch

In a dispute over a patented artificial hip prosthetic, a Federal Court in Indiana determined that Tranquil’s patent claims were invalid as indefinite under 35 U.S.C. Section 112, paragraph 2.  Specifically, the court found that the term “transverse sectional dimension” was indefinite to one skilled in the art. 

The second paragraph of Section 112 provides that the “specification shall conclude with one or more claims particularly pointing out and distinctly claiming the subject matter which the applicant regards as his invention.”  This section has been read to create a invalidity defense based on a lack of definiteness of the patent claims.  Generally, a claim is indefinite if its legal scope is not clear enough that a person of ordinary skill in the art could determine whether a particular [product or method] infringes or not.  Geneve Pharms, 349 F.3d 1373.

On appeal, the Court of Appeals for the Federal Circuit relied upon the purposes of the invention to determine that the one of ordinary skill would readily ascertain that the “transverse sectional dimension” is definite and calls for a two-dimensional measurement.

One of ordinary skill in this art would recognize that a one-dimensional linear measurement of the “transverse sectional dimensions” would defeat the purpose of the invention to provide a snug fit of the prosthesis in the medullary canal. A two-dimensional measurement, on the other hand, provides the snug fit that is the centerpiece of this invention.

The court went on to vacate the district court’s summary judgments on both indefiniteness and noninfringement. The case was remanded for further proceedings. 

Download Decision: Howmedica Osteonics Corp. v. Tranquil Prospects, Ltd. (04-1302).pdf

Stage Set For Hearing on Experimental Use Safe Harbor Statute at Supreme Court

Party and amicus briefs have been filed and the stage is now set for the April 20 hearing of Merck KGaA v. Integra LifeSciences at the Supreme Court. 

Merck v. Integra is slated to determine the scope of 35 U.S.C. §271(e)(1), the safe harbor statute that permits a drug manufacturer to perform potentially infringing experiments needed to obtain FDA approval without incurring liability for patent infringement.  A major question will be how attenuated an experiment may be and still fall within the protection from infringement liability offered by the statute.

I have summarized the various party and amicus briefs here.  The following links provide PDF copies of the briefs.

In Support of Merck:

• Brief by Petitioner Merck KGaA
• Brief for the United States Government
• Brief of Amici Curiae Eli Lilly, Wyeth, and Pfizer
• EON Labs Brief
• AARP Brief
• Amicus Brief for the Consumer Project and the Electronic Frontier Foundation (EFF)
• PhRMA Amicus Brief
• Amicus Brief for Sepracor
• NY Intellectual Property Law Association's Brief
• Brief of Genentech and Biogen Idec

In Support of Integra:

• Brief by Respondent Integra
• Benitec Amicus Brief
• Vaccinex Amicus Brief
• Applera and Isis Amicus Brief
• Invitrogen Amicus Brief
• WARF Amicus Brief

In Support of Neither Party:

• Professors' Amicus Brief
• AIPLA Amicus Brief
• Bar Association of the District of Columbia (BADC) Brief
• San Diego Intellectual Property Law Association (SDIPLA) Brief
• Biotechnology Industry Organization (BIO) Brief

Have a great weekend!

U.S. Patent No. 6,350,169 issued to Walter Holt of Hoffman Estates, Illinois covering a finger puppet with a tummy cavity for candy.

Federal Circuit Confirms that the Patent & Trademark Office is Not Bound to the Paris Convention

In re Dr. Matthias Rath (Fed. Cir. 2005).

In this trademark case, Dr. Rath appealed from a decision by the U.S. Patent & Trademark Office’s Trademark Trial and Appeal Board (TTAB) that refused to register the marks “DR. RATH” and “RATH.”

Dr. Rath is German and holds a German trademark registration for the marks.  However, the U.S. Examiner refused to register the marks after finding them to be “primarily merely surnames.”  Mere surnames are not registrable under the Lanham Act (Section 1052(e)(4)).

On appeal, Dr. Rath argued that the “primarily merely a surname” rule conflicts with the United States’ obligations under the Paris Convention.  The Federal Circuit dismissed his argument because, although the U.S. is a signatory to the Paris Convention, the Paris Convention is not ‘self executing’ and thus has no direct effect on U.S. law.

Further, the court held that the requirements under Section 44(e) of the Lanham Act cannot be read to require the U.S. to register marks with foreign priority if those marks fail to meet U.S. eligibility requirements.

In concurrence, Judge Bryson argued that there is no reason to decide whether the Lanham Act trumps the Paris Convention because in this case the two are in accord.

Link:

• File Attachment: Dr. Matthias Rath.pdf (108 KB)
• Of course, John Welch, the TTAB expert will provide more information in due course. (permalink).

 

 

CAFC: Licensee must hold all substantial rights under a patent to bring an infringement suit.

Aspex Eyewear v. E’lite Optik (Fed Cir. 2005) (04-1292)(NON PRECEDENTIAL).  

by Joseph Herndon

In general, a licensee is not entitled to bring suit in its own name as a patentee, unless the licensee holds all substantial rights under the patent.

Aspex appealed the decision of the District Court stating that Aspex lacked standing to sue as an exclusive licensee for infringement of two patents (one naming Richard Chao as the sole inventor and the second being a CIP of the first with brothers David and Richard Chao as the named inventors). 

Aspex entered into a written license agreement with Chic that granted Aspex an exclusive license in the U.S. to any rights Chic had acquired from third parties relating to patents involving magnetic eyewear. Later, Richard Chao granted Chic an exclusive license for two patents.

In September 2000, Aspex sued E’Lite for infringement of the two patents. Chic was not named as a party to the suit. The district court concluded that Aspex lacked standing to sue because Chic did not convey any future-acquired patent rights to Aspex, and thus Aspex was not an exclusive licensee of the asserted patents.

On appeal, the Federal Circuit held that the plain language of the Chic-Aspex Agreement makes it clear that the agreement relates only to patents then-owned by Chic, not future-acquired ones. The court contended that if the parties had intended to include future-acquired patents, it more likely would have stated “is and/or will become the owner,” within the agreement. The court also looked to use of the past tense “LICENSED” in term “LICENSED PATENTS” to suggest which patents were at issue.

The court further iterated that even though the license covered patents “relating to magnetic eyewear for eyeglasses,” a provision which certainly covers the two patents at issue, the specific grant provisions control the scope of the license agreement—not the general subject matter of the license. Thus, the court held Chic did not grant an exclusive license to either of the patents to Aspex, and as such, Aspex lacks standing to sue.

Joseph Herndon is a law clerk and at MBHB and is a registered patent agent. Joe has a stellar background in electrical engineering and will graduate from law school this year. herndon@mbhb.com.

Patents, String Theory, Anti-Aging, and the Warp Drive

I was discussing string theory with a buddy on the way to work this morning.  It turns out that the practical applications of string theory have not yet been fully realized — at least as far as patented technology is concerned.  Only eight issued patents and eight published applications refer to string theory in any way.  Of these, the two most interesting include Jerry Jacobson’s patented method for ameliorating the aging process by using electro-magnetic energy.  (U.S. Patent No. 6,004,257).

Although not yet issued, UK scientists Andrew Worsley and Peter Twist have applied for their patent on specifications for warp drive technology based on the theoretical underpinnings of both general relativity and string theory. (U.S. Pub. No. 2003–0114313). The Worsley-Twist warp drive does not depend upon traditional emissions of matter to create thrust.  Rather, the drive creates a change in the curvature of the space-time continuum — thus allowing travel by warping space-time.  Worsley & Twist recently responded to a rejection under Section 101 of the patent act.  The patent examiner raised concerns over the possibility of the claimed terms “graviton” and “warp drive.”  In their response, the applicants pointed out that the warp drive does not necessarily require superluminal (faster than light) travel.

 

Monsanto Asks The Federal Circuit To Examine The Utility Requirement for Patenting Biotech Inventions

In re Fisher (Fed. Cir. 2005)(04–1465) (Oral Arguments Scheduled for May 3, 2005).

Fisher could have an even greater impact to the field biotechnology than the upcoming Supreme Court case of Merck KGaA v. Integra.  After being denied a patent by the USPTO’s Board of Patent Appeals & Interferences (BPAI), Monsanto has appealed to the Court of Appeals for the Federal Circuit (CAFC). 

Monsanto’s argument is that the USPTO, without any statutory authority, is applying a heightened standard of utility to biotechnology inventions — specifically their argument is directed to the standard of usefulness under 35 U.S.C. Section 101 applied to nucleotide sequences known as expressed sequence tags (EST’s).  [EST definition]. On appeal, Monsanto has asked the CAFC to consider whether the BPAI’s ruling that EST’s corresponding to genes of unknown function are incapable of satisfying the utility requirement, even though the EST’s are quite useful as research tools. 

Monsanto’s appeal is a blunt attack against USPTO patent prosecution procedures and will impact a large number of biotech applications, past, present and future.  Hal Wegner has noted Monsanto may even be hoping to lose the appeal and thereby firmly establish a standard of utility that would keep others from obtaining patents in the area.

The briefs have all been filed, and oral arguments are scheduled for May 3, 2005. 

I have uploaded the briefs filed in the case.

• Monsanto's In re Fisher CAFC brief.pdf
• USPTO brief.pdf
• Monsanto's reply brief.pdf
• Amicus brief by Eli Lilly et al.pdf
• Amicus brief by Affymetrix.pdf
• Amicus brief by Genentech.pdf

The BPAI Decision is Available here: File Attachment: Ex Parte Fisher.pdf (209 KB)

Thanks to Paula Davis at Eli Lilly and Stephan Walsh at the USPTO for providing the PDF versions.

University of Texas files patent infringement suit against cell phone manufacturers

Regents of UT v. BenQ (N.D. Tex.) (05–CV-181).

The University of Texas has filed suit against fourteen electronics manufacturers for infringement of a patented method that allows text messaging through a standard telephone keypad.  The patent was issued to Professor George Kondraske in 1987 and covers a form of “predictive text.”  (U.S. Patent No. 4,674,112).  According to Katherine Mangan in the Chronicle of Higher Education, Kondraske teaches electrical and biomedical engineering at the system's Arlington campus.

The lawsuit was filed this month in U.S. District Court in Austin, and charges Kyocera, the Sanyo North America, Sony Ericsson Mobile Communications, NEC USA, and others of infringement.  Judge Sam Sparks has been assigned the case.

According to the U.S. Patent Office, the University of Texas system received 101 patents in 2004 — ranking fourth behind the University of California, CIT, and MIT.

Links:

• ‘112 Patent Enforcement Website
• Complaint
• University of Texas Press Release

Plaintiff's Misconduct Results in a Loss of Damages and a New Trial

Schreiber Foods v. Beatrice Cheese (Fed. Cir. 2005).

Schreiber sued Keuster for infringement of a patented method of slicing and storing cheese.  (U.S. Patent No. 5,701,724).  At trial, a Schreiber director falsely testified that Schreiber Foods owned the patent that had actually been assigned to a third party during the litigation. After trial and verdict, Schreiber’s trial counsel assisted Schreiber in re-acquiring the patent, but did not disclose the assignment to the district court or to opposing counsel.

Upon a Rule 60(b) motion to vacate the judgment, the district court found that Schreiber’s lack of ownership during the litigation deprived Schreiber of standing and rendered the suit moot — thus voiding the judgment.  In the alternative, the district court found that the plaintiff’s litigation conduct constituted fraud, misrepresentation or misconduct.

On appeal, the CAFC first found that the case was not moot, because Schreiber had standing when the trial started (before the original assignment) and had now re-acquired standing.

A temporary loss of standing during patent litigation can be cured before judgment.

On the issue of fraud, the CAFC agreed that there “can be no claim that Schreiber’s conduct is not sanctionable.”

Quite apart from whether Schreiber’s misstatements in the period before September 1998 were sanctionable, the conduct of Schreiber and its counsel after September 1998, when counsel became aware of the assignment of the ’860 patent, was plainly sanctionable. Once counsel became aware that highly material false statements had been made by a witness, in pleadings submitted to the court and in response to discovery requests, and that highly material documents had not been produced as required, Schreiber and its counsel were under an obligation to promptly correct the record.

The CAFC therefore held that the district court properly vacated the entire judgment and that a new trial on all issues is the appropriate sanction.  

File Attachment: Schreiber Foods v. Beatrice Cheese.pdf (67 KB)

Asyst Technologies v. Emtrak

Asyst Technologies v. Emtrak (Fed. Cir. 2005).

Asyst sued several companies for infringement of its patented information processing system directed at an inventory management system used in the production of integrated circuits. 

On appeal, Asyst argued that the lower court had improperly awarded summary judgment of noninfringement to two of the defendants  Based on an ordinary meaning contextualized by the specification and prosecution history, the CAFC found that “mounted on” language of the claims should be given an ordinary, but not overly broad meaning.

The appellate panel took a step back when asked to determine whether a defendant was liable under the doctrine of equivalents.

Inasmuch as the district court has not addressed that question, we think that rather than address that issue ourselves, it is preferable to leave that question to the district court, which is conversant with the evidence proffered by the parties at the summary judgment stage.

AFFIRMED IN PART, VACATED IN PART, and REMANDED.

File Attachment: Asyst Tech v. Emtrak.pdf (92 KB)

Microsoft requests rehearing in Eolas Appeal.

“Exporting this brief could violate 35 U.S.C. Section 271(f) under the Panel’s mistaken construction of that statute.”

So begins the Amicus brief submitted by Bentley Systems, et al., in support of Microsoft’s petition for rehearing in Eolas v. Microsoft (Golden Master I).  Bentley goes on to argued that the Court should maintain a principled and clear distinction between (a) supplying physical components of a physical patented invention, versus (b) supplying engineering design information that can be used to manufacture components of a patented invention. 

In Eolas v. Microsoft, a three member appellate panel at the Federal Circuit appears to have expanded the scope of Section 271(f) – a statute that creates a cause of action for infringement due to foreign sales when a component of a patented invention is supplied from the U.S., knowing that the component will be combined in an infringing manner outside the U.S.  Microsoft had shipped a “Golden Master” of computer code for Internet Explorer (IE) to its foreign suppliers who then copied the disk and sold the copies on foreign soil.  This activity was seen as infringing, even though the patented invention was not practiced until at least the 3rd step above.

Of course, Microsoft agrees that the CAFC’s decision was mistaken.  In its petition for a rehearing Microsoft argues that the that the panel decision is contrary to Pellegrini v. Analog Devices — a case that were virtually ignored by the CAFC opinion.  In their brief, AOL & Intel agree that the panel’s application of 271(f) cannot be reconciled with Pellegrini and prior U.S. patent law. [AOL & Intel Amicus Brief].

As I have mentioned before, this case may have wide reaching effects.  In its amicus brief, Shell Oil notes that the panel's opinion overreached when it declared that "every form of invention eligible for patenting falls within the protection of section 271(f)." Specifically, Shell, one of the most multinational of corporations, is concerned that they will be found to be violating patented processes that were somehow exported from the U.S. [Shell Oil Amicus Brief].

In disagreeing with the CAFC decision, the Business Software Alliance (BSA) makes both a legal argument and a policy argument.  On the legal side, BSA describes the Golden Master disks as templates that are not incorporated into patented inventions.  Their argument, that is not controverted by the CAFC decision, is that 271(f) was not enacted to “ensnare companies that transmit know-how.” On the policy side, the BSA notes that the decision hurts U.S. software developers and adds another incentive to outsource such work to developers in another country. [BSA Amicus Brief].

It is difficult to even make an educated guess as to how long it may take for the Federal Circuit to decide the petition.  In one case, a petition for rehearing has now been pending for almost a full year.

• Microsoft Petition for Rehearing
• Bentley Amicus
• Shell Oil Amicus
• AOL & Intel Amicus in support of rehearing (2328 KB)
• Business Software Alliance (BSA) Amicus in support of rehearing (591 KB)

Thanks to Joseph Milowic, Janine Carlan, Joe Miller and John Vandenberg for helping me locate the briefs.

How to Get a Job in Intellectual Property Law

PLI is hosting a free audio webcast titled “How to Get a Job in IP Law," March 28, 2005 from 1:00 - 2:00 p.m. (EST) (also available as a teleconference).  Katharine Patterson a consultant in the area of recruitment & training of IP profesionals will share her knowledge on the talents, training, and backgrounds that firms and corporations are seeking in the IP field. This presentation will be geared toward law students and young professionals — although it will be useful for anyone considering a job change.  Topics include:

• A survey of the types of IP jobs available.
• Jobs for scientists and non-scientists.
• How to demonstrate interest in experience to potential employers.
• What are the best networking opportunities.
• And more. . .

There will also be some time for questions at the end of the presentation.

Registration:

• Via Webcast
• Via Teleconference
• Register by phone: (800) 260-4754. (Priority code: ZPX5-8AEM1.H).

Links:

• Legal Jobs Blog (hosted by Tech Law Advisor)

Ford settles patent lawsuit

The Chicago Tribune (Jim Mateja) is reporting that Ford has settled a patent infringement action initiated by individual inventor, Frank Weyer. In the suit, Weyer accused Ford of infringing his patent that covers a "user selectable multi-color automobile instrument panel illumination."  (Patent No. 5,975,728).

Ford's new 2005 Mustang had planned to include a MyColor feature that reportedly infringes. According to the Tribune, “Ford had been barred from offering its My Color option or delivering cars with it because of the suit, but now can start sales and shipments.”

In addition to being an inventor, Weyer is a patent attorney with an office in Beverly Hills, California.  In an earlier lawsuit, Weyer sued Network Solutions and Register.com for violating their patent on the selection of an e-mail address based on a domain name. www.whois.sc/news/2004-01/registrars-sued.html.  He also spent time coordinating the rural technology unit of the Peace Corps.

2005 Business Methods USPTO Partnership Meeting

In May 2005, the USPTO will host its Spring 2005 Business Methods Customer Partnership Meeting.  This forum will likely provide a valuable opportunity for patent prosecutors to learn what goes on at TC 3600 beyond the MPEP. 

The director and managers of of the Business Methods workgroup will be there for an informal partnership meeting to discuss topics such as public pair, quality initiatives, the determination of statutory subject matter, and other topics specific to business methods.

DATES AND LOCATION: The partnership meeting will be held on Wednesday May 4, 2005, from 1:00 P.M.-5:00 P.M. at the USPTO MADISON AUDITORIUM, Concourse Level, Madison Building, 600 Dulany Street, Alexandria, VA 22313.

Attendance reservations are taken on a first-come first-served bases.  However, the USPTO may limit the number of attendees from any single organization or law firm. Therefore, organizations and law firms should designate an official representatives. No one will be permitted to attend without an accepted attendance request.

To attend, contact Joe Thomas via FAX: (703) 746-5897, or e-mail: joseph.thomas@uspto.gov by April 20, 2005. 

Links:

• TC 3600 Homepage
• Follow-up from the 2002 meeting
• TC 3600 Contacts

Patent Attorneys Testify to Consistency of Federal Circuit Court of Appeals

Patent attorneys often complain about the fractured relationship in the judicial system (i) within the Federal Circuit Court of Appeals and (ii) between the Federal Circuit and the trial courts.  The high rate of reversal on issues such as claim construction is often cited as an example of the disconnect.

Keeping these complaints in mind, yesterday’s testimony in the House of Representatives Intellectual Property Subcommittee was remarkable because of the clear affirmation from all four witnesses that the Federal Circuit should be the court that hears patent appeals. 

The witness list included a representative from the Federal Circuit Bar Association, a law school professor, an in-house counsel, and a practicing patent attorney.  These witnesses all supported legislative changes to overrule Holmes Group v. Vornado (holding that the Federal Circuit does not have jurisdiction over cases where patent issues are raised only in a counterclaim).

In support of their call for a change, the witnesses cited both (i) the legal consistency of the Federal Circuit and (ii) the technical knowledge of the Federal Circuit.  Congressman Lamar Smith (R Tex) chairs the subcommittee.

LINKS:

• AIPLA letter to the House Subcommittee
• Preview of the Hearings
• House Judiciary Committee -- IP Subcommittee
• Intellectual Property Owners (IPO) Association
• Holmes Group Opinion

Snippets: Review of Developments in Intellectual Property Law

MBHB’s snippets^TM newsletter provides a timely review of developments in intellectual property law. Here is a table of contents of the most recent issue (March 2005: Volume 3, Issue 1):

1. Daniel Boehnen and Deana Larkin, Trends in E-Discovery: New Local Rules and Recent Judicial Opinions.
2. Michael Greenfield, Jennifer Pope, Dennis Crouch, and Elaine Chang, The Primary Source for Claim Construction: Dictionary or Specification.
3. Kevin Noonan, The Continued Confusion Over Written Description.
4. Dennis Crouch and Baltazar Gomez, Legislative Update: Joint Research Agreements May Protect Patent Rights.

You can e-mail the editor (snippets@mbhb.com) to receive a PDF copy of the newsletter.  Include your mailing address if you would like a hard-copy.  In the e-mail, please indicate your technology and legal interest: (Biotech, Electrical, Software, Chemical, Mechanical, Litigation, and/or Prosecution). 

Past Issues:

• November 2004
• July 2004
• April 2004

Congress Discusses Which Court Should Hear Patent Cases

The AIPLA is supporting a measure to legislatively overrule the 2002 Supreme Court case of Holmes Group v. Vornado.  The House Subcommittee on Courts, the Internet, and Intellectual Property is holding a hearing today to discuss the matter. 

Specifically, the AIPLA argues that the holding will allow regional circuits and even state courts to begin to hear patent counterclaims.  This scenario was suggested by the Indiana Supreme Court ruling in Green v. Hendrickson Publishers, Inc., 770 NE2d 784, 63 USPQ2d 1852 (Ind. 2002).  In moderation, the AIPLA believes that if patent claims are raised in a compulsory counterclaim then the Federal Circuit should have jurisdiction.  On the other hand, if the patent claims are raised in a permissive counterclaim then the regional circuit or state court should have jurisdiction. 

The Subcommittee hearing is scheduled for 3:30 p.m. Eastern and will be broadcast over the Internet here.  Those testifying include Edward Reines on behalf of the Federal Circuit Bar Association; Professor Arthur Hellman from the University of Pittsburgh School of Law and expert on the structure of the Courts; Sanjay Prasad, Chief Patent Counsel for Oracle Corporation, and Meredith Martin Addy from Brinks Hofer.

Although the cameras would normally be focused tightly on the patent hearing, as Matthew Buchanan points out, MLB is also testifying today on the Hill.

LINK:

• AIPLA letter to the House Subcommittee

 

CAFC: Ordinary Meaning Defined By Context of Written Description

Medrad v. MRI Devices (Fed. Cir. 2005).

Medrad filed suit against MRI Devices for allegedly infringing Medrad's patented radio frequency (RF) coils used in magnetic resonance imaging (MRI).  The district court granted a partial summary judgment of invalidity after construing the claims of the patent.

On appeal, the CAFC struggled to give meaning to a claim that “itself provides little guidance.”

Interpreting the term “substantially uniform,” the court rejected Medrad’s argument that the “court may not look to how an invention functions in determining the meaning of claim terms” — finding that proposition “as unsound as it is sweeping.”

We cannot look at the ordinary meaning of the term . . . in a vacuum. Rather, we must look at the ordinary meaning in the context of the written description and the prosecution history. Quoting DeMarini Sport (Fed. Cir. 2001).

Basing its decision on (1) claim language, (2) the specification, and (3) expert testimony, the appellate court found that “substantially uniform” in reference to a magnetic field meant that the magnetic field is sufficiently uniform to obtain useful MRI images.

Affirmed.

 

Intellectual Property Podcasting

Podcasting is catching on as an extension of the blog.  According to the Wikipedia, a podcast is like an audio magazine subscription: a subscriber receives regular audio programs delivered via the Internet, and can listen to them at their leisure.

Podcasts differ from traditional Internet audio in two important ways. In the past, listeners have had to either tune in to web radio on a schedule, or they have had to search for and download individual files from web pages. Podcasts are much easier to get. They can be listened to at any time because a copy is on the listener's computer or portable music player (hence the "pod" in "podcasting"), and they are automatically delivered to subscribers, so no active downloading is required.

Using podcast technology, for instance, a podcasting program can automatically download new .mp3 files from your favorite blog.  Of course, you can always just click on the .mp3 broadcast from your browser and listen to the podcast through your computer’s speakers.

So far, I know of three podcasting groups in the IP world so far:

• The “Rethink (IP) Aloud” group is made up of patent attorneys Stephen Nipper, Douglas Sorocco, and Matthew Buchanan.  Their inaugural podcast is available here.
• Evan Brown, author of InternetCases.com describes cases involving the law of the Internet in his podcasts.
• Denise Howell has been podcasting for the longest in the group — you can listen to her interview with Wallace Wang, author of Steal This File Sharing Book here.

Look for the inaugural Patently-O Podcast coming next month.

Aside: Since I am discussing blogging, I would recommend purchasing the newest version of Blogjet.  It is great and integrates very nicely with Typepad.

CAFC: Claims Construed Based on Specification and Prosecution 'Read as a Whole'

ASM America v. Genus (Fed. Cir. 2005)

In a dispute over a method of sequential atomic layer deposition (ALD), ASM sued Genus for infringement of its patents.  After construing the claims, the magistrate granted summary judgment of non-infringement in favor of Genus.  ASM appealed the construction.

On appeal, the CAFC affirmed, finding that the district court was "on firm ground." 

The disputed construction involved the term "evacuate."   ASM argued that evacuate should encompass use of an inert gas to push gases out.  However, the Appellate Panel found that, "when the specification and the prosecution history are read as a whole, it becomes clear that the insertion of inert gas may help render the process of evacuation more efficient, but is not part of the evacuation itself."

Summary judgment of non-infringement affirmed.

Appeals Court Partially Reverses eBay Patent Case: Setting the Stage for a Permanent Injunction

MercExchange v. eBay (Fed. Cir. 2005)

by Dennis Crouch

At the district court level, Thomas Woolston, creator of the MercExchange and Patently-O Reader, won a $35 million patent infringement suit against eBay for infringement of his patents covering live internet auctions.  On March 16, 2005, the Federal Circuit released its decision on appeal, reversing the decision in-part, but setting the stage for a permanent injunction against eBay.

On appeal, the Federal Circuit partially overturned the district court's decision, finding that at least one of the MercExchange patents invalid but vacating the lower court's ruling that another patent was invalid.

Perhaps most importantly, MercExchange challenged the district court's refusal to issue a permanent injunction against eBay's use of the invention.  The CAFC agreed with MercExchange, that the district court "did not provide any persuasive reason that this case is sufficiently exceptional to justify the denial of a permanent injunction."  Specifically, the CAFC found that the fact that MercExchange expressed a willingness to license was not a valid reason for depriving it of the right to an injunction to which it would otherwise be entitled.

If the injunction gives the patentee additional leverage in licensing, that is a natural consequence of the right to exclude and not an inappropriate reward to a party that does not intend to compete in the marketplace with potential infringers. . . . We therefore see no reason to depart from the general rule that courts will issue permanent injunctions against patent infringement absent exceptional circumstances.

Of course, there is only a very small likelihood that eBay would allow its servers to be shut-down rather than settle the case.  In addition, it is unclear how an injunction would operate in this case, although it would most likely only alter e-bay's 'buy it now' feature.

Finally, the appellate panel affirmed the portion of the judgment denying an award of enhanced damages or attorney fees for MercExchange.

AFFIRMED IN PART, REVERSED IN PART, VACATED IN PART, and REMANDED.

The MercExchange patents are also under reexamination at the Patent Office.  However, if the litigation concludes before the reexam is complete, there is some question as to whether the reexam can be used by eBay to re-open the case.  One issue stems from the 1803 case of Marbury v. Madison where the Supreme Court held that the Judiciary, not the Executive Branch that determined the law.  In this case, the PTO (Executive Branch) would be telling the Judiciary to change its mind.

Links:

• Federal Circuit Opinion.pdf
• eBay Press Release:

March 16, 2005 04:02 PM US Eastern Timezone

eBay Statement on U.S. Court of Appeals Ruling in MercExchange Case

SAN JOSE, Calif.--(BUSINESS WIRE)--March 16, 2005--eBay (Nasdaq:EBAY) is pleased with today's decision by the U.S. Court of Appeals that invalidates one of MercExchange's patents, and as a result, throws out all the related damages. Looking forward, we believe that any injunction that might be issued by the District Court with respect to the other patent will not have an impact on our business because of changes we have made following the District Court's original verdict. The U.S. Patent and Trademark Office is actively reexamining all of MercExchange's patents, having found that substantial questions exist regarding the validity of MercExchange's claims. The Patent and Trademark office has already initially rejected all of the claims of one of MercExchange's patents. We are confident in our position against MercExchange and do not believe that these matters will have any impact on our business.

BlackBerry lawsuit settles for $450M US: Patent Law Questions Remain

The legal saga involving NTP’s patents covering Research-In-Motion’s BlackBerry (R) technology appears to be over. According to news reports, RIM has settled the BlackBerry Lawsuit for $450M (US). 

The lawsuit did produce what appears to be an expansion of U.S. patent laws to cover infringing activity that partially occurs on foreign soil.  However, the settlement leaves a number of open questions regarding application of the newly expanded theory of liability. 

Links:

• CBC Report
• Discussion of the Federal Circuit Decision
• Canadian Government Intervention
• Proposed legislation to better codify and delineate the Federal Circuit’s decision in RIM v. NTP.

NOTE: The drawing above was used in RIM's brief at the U.S. Federal Circuit Court of Appeals to graphically show how a substantial portion of the 'infringing' activity occurred on foreign soil.  The Court rejected RIM's argument that activity across the border could not create liability under the U.S. patent laws.

CAFC: References on Face of Patent are Intrinsic Evidence for Claim Construction

V-Formation v. Benetton Group & Rollerblade, Inc. (Fed. Cir. 2005).

By Marcus Thymian

In its March 15 decision, the Federal Circuit affirmed a district court's grant of summary judgment of non-infringement of the claims of three patents relating to in-line skate technology.  The patents were directed to a particular frame design for attaching the wheels to the boot.  To provide flexibility in frame and wheel adjustment of a skate, the frame included two sidewalls "releasably attached" by a plurality of fasteners to toe and heel plates of the skate.   (For example, see U.S. Patent No. 5,873,584).

The dispute centered on whether rivets could serve as fasteners that "releasably attach."  The embodiments set forth in the patents-in-suit utilized screws as the releasably attaching fasteners.  The district court had construed the term "releasably attaching" to mean that the fasteners "must permit the sidewalls to be easily removed and replaced" and determined that one skilled in the art would not consider rivets to fall under that definition.  In reaching that conclusion, the district court looked to the specification of the patents-in-suit, as well as the specification of a patent (the "Meibock patent") cited on the face of one of the patents-in-suit.  Finally, the district court supported its construction by referring to an uncontrolling decision of the Federal Circuit that interestingly addressed the unremovable nature of rivets in in-line skates:  "Screws, unlike rivets and laminates, are meant to be unscrewed, that is, to be removed.  A rivet or a laminate, to the contrary, is meant to remain permanent, unremovable unless one is bent on breaking the permanent structure apart."

The Federal Circuit first agreed that the intrinsic evidence called for "releasably attaching" to be construed per the district court's definition.  It agreed that the intrinsic evidence included not only the patent specification, but also the cited Meibock patent:

The district court properly considered other intrinsic evidence to aid its construction.  For instance, the district court considered [the Meibock patent].  The Meibock patent is prior art that was listed as a reference on the face of the '466 patent and in an Information Disclosure Statement.  This prior art reference to Meibock is not extrinsic evidence.  This court has established that "prior art cited in a patent or cited in the prosecution history of the patent constitutes intrinsic evidence. …  The Meibock patent explains that the toe and heel plates are "permanently attached … through the use of rivets or releasably attached through the use of fasteners such as screws or bolts." …  Thus, the district court correctly concluded:  "[The] Meibock patent provides evidence that rivets are considered by persons of ordinary skill to be permanent fasteners."

Finally, the Federal Circuit approved of the district court's reference to its earlier uncontrolling decision addressing the removability of rivets, since the district court had merely used it to supports its independent conclusion in this case.

Marcus Thymian is a partner at McDonnell Boehnen Hulbert & Berghoff LLP in Chicago. Mr. Thymian is experienced in planning, creating, enforcing, and defending against patent portfolios, and has logged many miles on in-line skates over the past 20 years. [link to bio]

Links:

• Download CAFC Opinion.pdf;
• In-line Planet Website: skating articles, tutorials, and news;
• History of patenting of in-line skates.

Federal Circuit Remands Case To Determine Israeli Contract Law.

Israel Bio-Engineering Project v. Amgen et al. (Fed. Cir. 2005).

In a dispute over a patented tumor necrosis factor inhibitory protein, the Federal Circuit remanded to determine which party can claim ownership of an employee's work under Israeli law.

In addition, the Appellate Panel determined that the lower court had improperly denied one party leave to intervene as a defendant. Under Federal Rule of Civil Procedure 24(a)(2) parties must be permitted to intervene in an action:

when the applicant claims an interest relating to the property or transaction which is the subject of the action and the applicant is so situated that the disposition of the action may as a practical matter impair or impede the applicant’s ability to protect that interest, unless the applicant’s interest is adequately represented by existing parties.

In this case, the District Court found that the intervenor's interests were properly represented by Yeda.  The Federal Circuit disagreed, finding two instances where the interests of the two parties diverge: (1) Because laches is a personal defense, it cannot be raised by Yeda on behalf of another party and (2) the intervenor claimed to have a right to purchase the rights to project discoveries at no cost -- Yeda did not have such a right.  As such, the CAFC reversed -- allowing Serono to intervene.

 

Congress To Hold Hearings on Jurisdiction of Federal Circuit

The IPO is reporting that on Thursday March 17, 2005 at 3:30 p.m., the House IP subcommittee will hold a hearing on "Holmes Group, the Federal Circuit and the State of Patent Appeals."  In Holmes Group v. Vornado, the Supreme Court held that the Federal Circuit does not have jurisdiction over cases where patent issues are only raised in a counterclaim.  In its 9-0 opinion (Scalia, J.), the Court reasoned that "arising under" language of the statute so limits the jurisdiction of the Federal Circuit's.

The IP Subcommittee is chaired by Congressman Lamar Smith of Texas.  The ranking Democrat is Howard Berman of California.

My sense is that Congress intended the Federal Circuit to handle all patent cases, and just made a technical error in drafting the statute (hence the Scalia opinion).  If the various circuits do hear patent cases, I would be greatly in favor of applying Federal Circuit law as precedential.

Links:

• House Judiciary Committee -- IP Subcommittee
• Intellectual Property Owners (IPO) Association
• Holmes Group Opinion

CAFC: Implied Final Judgment Does Not Create Appellate Jurisdiction

Pause Technology v. TiVo (Fed. Cir. 2005).

At the district court, TiVo was awarded summary judgment of non-infringement -- The court found that TiVo's digital video recorder (DVR) 2.0 did not infringe Pause Tech's patent. (Reissue Patent No. 36,801). 

The Federal Circuit, however, refused to hear the case for lack of subject matter jurisdiction.  Specifically, because the district court had not ruled on TiVo's invalidity counterclaim, the appeal was "not from a final decision within the meaning of 28 U.S.C. § 1295(a)(1)."  Citing the Supreme Court case of Catlin v. United States, the CAFC defined a final judgment as a decision by the district court that "ends the litigation on the merits and leaves nothing for the court to do but execute the judgment."  From a policy standpoint, this rule ensures that appeals are not taken piecemeal.

In the present case, the district court did not expressly dispose of the invalidity counterclaim and no finding that the counterclaim was moot.  Thus, according to the CAFC, "the invalidity counterclaim remains pending."  As such, the summary judgment at the district court was not final.

Accordingly, this appeal is dismissed for lack of jurisdiction, subject to reinstatement under the same docket number without the payment of an additional filing fee if, within 30 days of the date of this opinion, a party appeals from the entry of a final judgment on the entire case or obtains a certification for appeal pursuant to Rule 54(b). If the appeal is reinstated, it will be decided by the present panel, based on the briefs already filed and the oral argument heard on January 13, 2005.

Dismissed.

CAFC Judge Mayer: “maybe posting paneling is a very, very bad thing.”

In December 2004, the Federal Circuit began a pilot program to announce the composition of appellate panels the week before holding oral arguments.  This program is now in jeopardy.

On March 10, the Federal Circuit heard oral arguments in Apotex v. Pfizer.  The New York district court had dismissed Apotex's declaratory judgment action due to a lack of case and controversy. At the district court level, this case fell in line with the recent CAFC decision Pfizer v. Teva holding that an ANDA filing does not, by itself, create a reasonable apprehension of suit. In dissent in Teva, Judge Mayer argued that the statute does provide that an ANDA filing constitutes an act of infringement sufficient to trigger a justiciable controversy.  As it turns out, Judge Mayer was also a panel member for the Apotex v. Pfizer appeal, along with Judges Plager and Gajarsa.

Keith Scala, who attended the Apotex v. Pfizer oral hearing noted that, according to counsel's arguments, Pfizer had executed a covenant not to sue Apotex a few days before the appellate arguments -- but only after learning that Judge Mayer would be a member of the appellate panel.  The covenant not to sue is seen to greatly strengthen Pfizer's argument that Apotex lacked jurisdiction to bring the DJ action.  However, executing the covenant may have been unnecessary had the appellate panel comprised a group more like that in Pfizer v. Teva.

According to Scala, at one point, Judge Mayer leaned over, looked squarely at Pfizer’s counsel and said,

“maybe posting paneling is a very, very bad thing.” 

Judge Mayer was, of course, referring to the the CAFC procedure of identifying the composition of panels several days in advance of the hearing. 

A decision will be expected in this case within the next few months.

CAFC: Marking must be pled, but specificity is optional

Sentry Protection v. Eagle Manufacturing (Fed. Cir. 2005)

In a case involving patented technology for protecting structural columns from motor vehicle accidents, the Federal Circuit affirmed-in-part and remanded.

One question on appeal involved whether the patentee could obtain damages for pre-suit infringement under a theory of constructive notice via marking.  The CAFC held:

1. Pleadings/Waiver: Although there is a requirement that "constructive notice" must be pled, pleading that the "infringement have been willful and with full knowledge of the . . . patents" was sufficient to avoid waiver.
2. Summary Judgment: Plaintiff had produced evidence of marking and an affidavit stating that its products had been marked -- this evidence is sufficient to reverse the district court's summary judgment of noninfringement for lack of constructive notice.

Links

• Download the Opinion.pdf

Payment from a Patentee to a Generic Manufacturer Does Not Create an Antitrust Violation.

Schering-Plough v. FTC (11th Cir. 2005).

In a March 8 decision, the 11th Circuit Court of Appeals set aside an FTC order that barred Schering-Plough from settling an infringement suit with generic makers over the patented blood pressure drug K-Dur.  FTC had concluded that the settlement was an "unreasonable restraint of trade."

The Appellate Court determined that because the suit involved patented products, neither a per se nor a rule of reason analysis would be appropriate.

We think that neither the rule of reason nor the per se analysis is appropriate in this context. We are bound by our decision in Valley Drug where we held both approaches to be ill-suited for an antitrust analysis of patent cases because they seek to determine whether the challenged conduct had an anticompetitive effect on the market. 344 F.3d 1294. By their nature, patents create an environment of exclusion, and consequently, cripple competition. The anticompetitive effect is already present. “What is required here is an analysis of the extent to which antitrust liability might undermine the encouragement of innovation and disclosure, or the

Applying their rule to the facts, the Court concluded that payment from a patent holder to a generic competitor cannot be the sole basis of a violation of antitrust law.

Simply because a brand-name pharmaceutical company holding a patent paid its generic competitor money cannot be the sole basis for a violation of antitrust law.

Accordingly, the court SET ASIDE the decision of the Federal Trade Commission and VACATED its cease and desist order.

Links:

• Download Schering Antitrust Decision.pdf
• Patent at issue, No. 4,863,743
• NYTimes Article
• PubPat Amicus Brief to the 11th Circuit [pdf]

Request for Attorneys Fees Does Not Create Subject Matter Jurisdiction

Sony Electronics v. Soundview Technologies (D. Conn. 2005) [pdf]

The district court granted summary judgment of non-infringement to the alleged infringers, and that decision was affirmed at the Federal Circuit.  Now Soundview, the patentee, has moved to dismiss all pending counterclaims because the patent has expired and, in light of the summary judgment, the remaining counterclaims are moot.

One defendant, however, argued that its declaratory judgment counterclaim seeking a finding of inequitable conduct during reexamination is not moot because it is a basis for an award of attorneys fees under 35 U.S.C. § 285.

Connecticut District Court Judge Janet Bond Arterson determined that the counterclaim should be dismissed because there was no actual controversy remaining that would be sufficient to create subject matter jurisdiction:

Section 285 . . . is not an independent basis for jurisdiction, providing only that "the court in exceptional cases may award reasonable attorney fees to the prevailing party." Thus, Sharp is entitled to seek attorneys fees on the underlying litigation on which Sharp has prevailed, but cannot create more litigation that is otherwise moot merely to create an alternative basis for attorneys fees.

Case Dismissed.

Patent Reform is in the Air: Are your views being heard?

The Patent Caucus is building steam as it crosses the United States -- Headed for Washington DC and patent reform legislation. 

If you have an interest in patent legislation, make sure your voice is heard now.

In a rare cooperative effort, the Federal Trade Commission (FTC), National Academies STEP Board, and the American Intellectual Property Law Association (AIPLA) are jointly hosting a series of town-hall conferences on patent reform and are discussing specific legislative proposals.  These agencies are working hard to get input from individuals and organizations interested in the patent process.  Conferences have already been held in San Jose and Chicago, with the final two stops in Boston (March 18) and Washington DC (June 9).  These town-hall meetings provide a rare opportunity to transparently assess proposed legislation and have your voice heard.  Transcripts of the meetings are being compiled and summaries will be provided to members of Congress during hearings on patent reform that are expected this year. 

Legislation is being proposed in a number of areas including: (i) a statutory fair use exemption from infringement liability for experimental use of a patented invention, (ii) a change to a first-to-file system and elimination of interference proceedings and other elements of , (iii) post grant opposition proceedings, (iv) changes to the wilfulness standard, and (v) expansion of prior-user rights.

These legislative proposals are still flexible and will be altered based on feedback from the town-hall meetings. 

I would like to invite you to take part in the remaining meetings.  If you cannot attend, feel free to contact me (crouch@mbhb.com) or William Rooklidge to present your proposal or other thoughts.

Links:

• Meeting and Registration Information from the AIPLA website.
• Matt Buchanan's Discussion of the Meeting and Patent Reform.
• PUBPAT has Questioned the Openness and Objectiveness of the Town Hall Meetings.  Professor Arti Rai, a PubPat director, is scheduled to speak at the Boston meeting. 
• PHOSITA's viewpoint with Links to Patent Reform Documents.
• Colette Vogele's viewpoint from the San Jose meeting.
• Dudas' Announcements at the Chicago Town Hall Meeting.

Design Patents: Appeals Court Finds Cell-Phone Infringement Suit to be Frivolous

Colida v. Sharp Electronics and Audiovox (Fed. Cir. March 9, 2005; NONPRECEDENTIAL).

Tony Colida has brought his patent infringement arguments to the federal circuit on several occasions.  (Background reading). In 2004, Colida lost patent infringement cases against Sanyo, Kyocera, and Matsushita.  In each case, the CAFC affirmed the lower court ruling that the accused products did not infringe Colida's design patents.

In the most recent case, the CAFC again affirmed -- finding that the district court did not err in granting summary judgment of noninfringement.

In Gorham v. White (1871), the Supreme Court announced the test for design patent infringement.

[I]f, in the eye of an ordinary observer, giving such attention as a purchaser usually gives, two designs are substantially the same, if the resemblance is such as to deceive such an observer, inducing him to purchase one supposing it to be the other, the first one patented is infringed by the other.

Following that rule, the federal circuit compared the accused phone with the design patent and found that the differences were sufficient for a finding of noninfringement on summary judgment.

In addition, the federal circuit found Colida's case to be frivolous:

Colida, in this case, continues his pattern of repeatedly filing meritless infringement complaints and pursuing appeals when the accused designs bear no realistic similarity to his design patents. Such conduct unnecessarily wastes the limited resources of the court. The differences between the [] patents and the [accused] handset are so obvious and pronounced that Colida’s allegation that the [accused] handset infringes his [] patents and that the district court erred in granting summary judgment is "beyond the reasonable contemplation of fair-minded people." Thus, we hold that the appeal is frivolous.

Trial Lawyers Beware: The Mock Jury Has Been Patented

To put everyone on notice: The method of conducting a mock trial has been patented.  The patent, No. 6,607,389, claims priority to a 2001 provisional filing date.  The novel portion of the claim appears to be that both the stricken and not-stricken members of the jury pool hear the case.  Claim 1 reads as follows: 

1. A method of conducting a mock trial exercise . . . comprising:

• assembling an initial pool of potential mock jurors;
• questioning members of the initial pool . . .;
• striking members of the initial pool for cause . . .;
• permitting the attorney[s]to make a number of peremptory strikes of members of the initial pool . . .;
• assembling a probable jury comprising members of the initial pool not struck;
• assembling a stricken jury comprising members of the initial pool struck;
• presenting [at least a summary of the case] to both the probable jury and the stricken jury.

The patent was awarded to Dr. Louis Genevie, founder of Litigation Strategies, a New York jury research and consulting firm.  Thanks to Dan Ravicher at PubPat for showing me this one. 

CAFC: Claim language first, specification second, prosecution history third…

Iowa State and Vanderbilt v. Wiley (Fed. Cir. March 7, 2005, NONPRECEDENTIAL)

By John Smith, PhD  

Iowa State University Research Foundation, Inc. (ISURF), Vanderbilt University, et al. appealed a Judgment as a Matter of Law granted by the District Court for the Southern District of Iowa that U.S. patent No. 5,348,979 was not infringed by Wiley Organics. 

 

ISURF sought injunctive relief and damages for Wiley’s allegedly contributory infringement and inducement of infringement for producing ß-hydroxy-ß-methylbutyric acid, or HMB.  Wiley supplied HMB to MTI exclusively from 1995 to 2000.  In 2000, Wiley began to distribute the compound to other companies.  At issue on appeal was the construction of the claim terms “subject” and “patient.”  Claim 1 of the patent was considered to be representative:

1. The method of protein sparing, comprising orally or intravenously administering to a human subject an effective amount of ß-hydroxy-ß-methylbutyric acid (HMB) for increasing the retention of nitrogen, said HMB being in an edible or intravenously-administrable form selected from (i) its free acid form, (ii) its sodium, potassium, or calcium salt, (iii) its methyl or ethyl ester, or (iv) its lactone, and continuing the said administration of HMB until the amount of nitrogen in the patient's urine has substantially decreased.  (Col. 6, ll. 7-16.)

The ISURF argued that the terms encompassed healthy individuals as well as those in need of treatment with HMB.  The District Court, however, had construed the claims in Wiley’s favor, ruling that the claims did not encompass healthy individuals, but only those with a “negative nitrogen balance” (in need of HMB treatment).

 

In the appellate decision, the Federal Circuit began with the claim language.  It noted that the terms “subject” and “patient” are used interchangeably in the patent, with no qualifications, other than that the individuals are human; the Court noted that there is no language indicating the sick or elderly are the only individuals contemplated to be within the scope of the claims.  The claim language also indicated that a relative change in nitrogen levels was all that was required by the claims; any decrease in nitrogen levels was within the scope of the claims.

 

The Court then proceeded to examine the specification.  It noted that the only experimental example in the specification had normal, healthy individuals as subjects.  The Court also noted that other language in the specification described the treatment of normal, healthy subjects.

 

Last, the Court examined the prosecution history.  It concluded that interpretations of the claim language by the examiner was not important, as the prosecution history revealed that the rejection by the examiner was based on the examiner’s interpretation of the prior art, not whether the claims were limited to treatment of sick individuals.

 

The order granting JMOL was vacated and the case remanded for further proceedings consistent with the Federal Circuit’s claim construction.

John Smith is an attorney at MBHB LLP in Chicago.  He earned both his JD and PhD (inorganic chemistry) from Vanderbilt University. He has co-authored numerous articles and served as a faculty member in the Chemistry Department of Lipscomb University in Nashville, Tennessee.

Keep track of terminal disclaimers

When filing a terminal disclaimer to overcome a double-patenting rejection, federal rules require a statement of common ownership of the two patents.  In the recent case of Bellehumeur v. Bonnet (Fed. Cir. March 8, 2005, NONPRECEDENTIAL), the patentee had filed such a statement for two patents relating to a puck for use on a non-ice surface.  (U.S. Patent No. 5,275,410).  However, during litigation, Bellehumeur could not produce any evidence that he was the exclusive owner of both patents.  As a result, the CAFC vacated the infringement judgment and remanded for a determination of ownership and enforceability.

CAFC: Substantially Flattened Is Defined As Flatter Than A Cylinder

[Link to the patent drawings]

The Federal Circuit has given its ruling in a dispute over patented tampon technology.  (U.S. Patent No. 4,536,178 [pdf]).  At the district court level, the judge had awarded summary judgment of noninfringement to the alleged infringer.  However, on appeal, the CAFC reversed, finding that the lower court had improperly interpreted the term "substantially flattened" to mean "flattened."

The issue is whether the patentee properly claimed an oval as a "substantially flattened" circle, or more specifically, an elliptical cylinder as a "substantially flattened" cylinder. In construing the term "substantially flattened surfaces" as something flat in practice the district court erred in going beyond the intrinsic evidence. That evidence clearly indicated that the patent contemplated curved surfaces. Thus, we reverse the district court's claim construction and conclude that "substantially flattened surfaces" means surfaces, including flat surfaces, materially flatter than the cylindrical front portion of the applicator.

In what may be a fore-shadowing of the upcoming Phillips opinion, the Court rejected the idea that (i) the term was ambiguous; (ii) that an expert's testimony could be used to modify the ordinary meaning; or (iii) that the drawings limited the scope of the claimed term.

On remand, the Federal Court in Ohio must determine whether the newly interpreted claims cover the allegedly infringing product.

LINK:

• Download the Decision: Playtex v. P&G (Fed. Cir. 2005) [pdf].

The Expanding Reach of U.S. Patent Laws

Eolas and RIM Decisions Change the Potential for U.S. Damages Based on Foreign Infringing Activities

As I mentioned earlier, from a legal standpoint, the most important aspect of the Eolas v. Microsoft decision [pdf] is its treatment of extraterritorial infringement. Under traditional notions, U.S. patent law did not extend beyond the territorial bounds of the country. Although this principle was affirmed in the CAFC 2004 case of Pellegrini v. Analog Devices (cert. denied 2004), it appears now that Pellegrini has been narrowly interpreted.

With the one-two punch of Eolas and RIM v. NTP [pdf decision], the CAFC has laid-out a clear path for patent holders to collect damages for certain infringing activity occurring abroad. These cases are based on software-type technology, however, I see clear applications to other technologies, including biotechnology.

In Eolas, the patentee claimed an “executable application” used for a specific purpose. The CAFC upheld Microsoft’s liability for infringement due to its foreign sales under Section 271(f) of the patent statute. Section 271(f) creates a cause of action for infringement due to foreign sales when a component of a patented invention is supplied from the U.S., knowing that the component will be combined in an infringing manner outside the U.S. 

As in the figure above, Microsoft had shipped a master copy of computer code for Internet Explorer (IE) to its foreign suppliers who then copied the disk and sold the copies on foreign soil.  This activity was seen as infringing, even though the patented invention was not practiced until at least the 3rd step above.

Thus, two principles of emerge from Eolas: (i) there is no "physicality" requirement for a component of a patented invention to fall within the statute; and (ii) the shipped component itself need not be part of the infringing use, rather a foreign produced copy of the shipped component can create infringement liability when the copy is to be used in an infringing manner.

Of course, one of the closest parallels to computer code is genetic code.  Quite easily, the CAFC Eolas decision could be expanded to include shipment of DNA or other genetic material abroad for replication and incorporation into a patented invention.

The RIM (RIMM) v. NTP opinion concerning the hand-held BlackBerry held that plain language of section 271(a) does not preclude infringement where a system is used within the United States even though a component of that system is physically located outside the United States.  According to the Court, the test is not whether the infringement took place within the United States, but whether "control and beneficial use" of the infringing system was within the United States.  It appears that "control and beneficial use" will be liberally construed -- for instance, in RIM's case, control of the system and RIM headquarters were in Canada.  End users, however, were located in the U.S.  At a minimum, control and beneficial use of the BlackBerry system was located in both the U.S. and Canada.

The RIM case has potential to have a major impact on outsourcing of manufacturing and services.  Essentially, a call center located in India may now be found to be infringing a U.S. patent if a court finds that the control and beneficial use of the system can be seated in the U.S.

PTO Director Jon Dudas Commits to Patent Reform Measures -- saving applicants $30M+ annually

Jon Dudas, PTO Director, gave a great luncheon talk at the well attended Town Hall Meeting on Patent Reform held in Chicago.  In his speech, he gave a commitment to work toward patent reform measures in Congress.  Dudas has worked on Capitol Hill for many years and has strong relationships with key Republican members of Congress.  His active support will be critical for any patent legislation. 

The big news, however, were his clear statements on non-legislative steps the PTO is undertaking to solve a number of well known problems at the Office.  Specifically, Undersecretary Dudas spoke on (i) transparency; (ii) reexaminations; and (iii) appeals.  The best aspect of the ideas that Dudas presented is that the solutions can be implemented by the PTO without Congressional action.

(i) Transparency: Dudas is a big believer in the motto: "You cannot improve what you cannot measure."  With that in mind, he is implementing a number of new systems for measuring how well the PTO is doing in terms of both pendency and quality.  These include more in-process reviews as well as a reformation of the pendency statistic.

Historically, pendency has been calculated by looking at newly issued patents to determine how long they took to issue.  This calculation is obviously backward looking.  Now, the PTO is implementing forward looking measures to determine the 'firepower' of various technology areas.  Specifically, the PTO's firepower number is an estimate of, given the current backlog and workforce, how long would it take for a patent filed today to issue or be abandoned.  This number will be more difficult to calculate, but is necessary if the pendency number is to serve as any basis for improvement at the PTO.

(ii) Reexamination: At the conference, there is quite a bit of discussion on legislative efforts to enact a post-grant reform system through legislation.  However, Dudas believes that the reexamination procedures currently available provide a valuable means for improving patent quality of the most important patents (those being litigated).  The problem is that the PTO is much too slow in evaluating reexams.  Almost half of reexams take over two years and many over four years to complete.  In his talk, Dudas gave a commitment to cut pendency of all reexams to two years or less.  To ensure quality, Dudas plans to implement a supervisory review process of for all reexams.

(iii) Pre-Brief Appeal Conference: Finally, in an announcement that may save at least $30M in annual attorney fees, Undersecretary Dudas indicated his plans to introduced an opportunity for a pre-brief appeal conference to give the applicant an opportunity to discuss perceived errors by the Examiner in conference with the Examiner and at least one supervisor or SPE.  The thought is that this conference may eliminate a good portion of easy cases that are normally decided only after the applicant files a (costly) brief. 

I was able to talk with a number of great attorneys at the meeting, including Undersecretary Dudas, Greg Mayer, Matt Buchanan, Bill Rooklidge, and Herb Wamsley.

Patent Office Director, Jon Dudas, to Announce Improvements to Patent Process

At Friday's Town Hall Meeting on Patent Reform in Chicago, Jon Dudas, the Director of the U.S. Patent & Trademark Office is expected to announce a number of new initiatives to improve patent quality, decrease pendency time, and decrease patent prosecution costs.  According to Bridgid Quinn, the PTO's Public Affairs Chief, "one program will save patent applicants $30 million annually."

I am planning to be at the town meeting, but as luck would have it, I forgot to pre-register.  Hopefully I can simply flash my Patently-O badge and get free entry.  If you are attending, come say hello. (Here is my picture, but I won't be wearing a suit.).

Info:

• Friday March 4, 2005 (All Day)
• Hyatt Regency Hotel at McCormick Place
• Brochure

USPTO: Do Not Send Mail To PTO's DC Address

Although the USPTO moved to Virginia almost two years ago, it has still been accepting mail at its DC address.  That practice is changing: 

Effective April 4, 2004, all mail sent to the USPTO's Washington DC 20231 address will be returned to sender.  Such returned mail will not be considered proof of filing.  Unless otherwise indicated, patent-related mailings should be sent to: Commissioner for Patents P.O. Box 1450 Alexandria, VA 22313-1450. 

Link:

• USPTO Notice
• Patent Office Mailing Addresses

PTO Adds To Advisory Committee

The Patent Public Advisory Committee consists of a group of individuals selected by the Commerce Secretary (Gutierrez).  The committe's purpose is to advise the Director of the PTO (Dudas) on the management of operations of the Office. Three new members have been appointed to serve their three-year term:

• Carl Gulbradsen, Managing director of WARF in Madison, Wisconsin;
• Andrea Ryan, VP and assistant general counsel at Wyeth; and
• Dean Kamen, inventor and chairman of Segway LLC.

The nine-member PPAC is on a three-year rotating schedule.  Each year three new members are appointed.  Traditionally, each Fall, the PTO Director requests nominations for the position.  Congratulations to the new members of the committee.

Appeals Court Orders New Trial in $500 Million Microsoft-Eolas Web Browser Case

Eolas v. Microsoft (Fed. Cir. March 2, 2005).

Eolas and the University of California sued Microsoft for infringement of its patent that involves a method of using a web browser to open third-party applications using plug-ins.  The District Court for the Northern District of Illinois granted final judgment to Eolas after a jury found that Microsoft infringed the patent and actively induced United States users of Internet Explorer to infringe. The district court also invoked 35 U.S.C. § 271(f) to include foreign sales of Internet Explorer in the royalty awarded to Eolas.  The jury awarded Eolas a royalty of $1.47 per unit of infringing product, which amounted to a total award of $520,562,280.

On appeal, the Court of Appeals for the Federal Circuit (CAFC) found that district court improperly granted judgment as a matter of law (JMOL) in Eolas’ favor on Microsoft’s anticipation and obviousness defenses and improperly rejected Microsoft’s inequitable conduct defense -- and thus vacated the district court’s decision and remanded for a new trial on these issues. The CAFC also affirmed the district court's claim construction and related jury instruction. 

Finally, the biggest news from a patent law perspective is that the Court affirmed the district court’s holding that "components," according to section 271(f)(1), include software code on golden master disks.

February 2005 Report on New Academic Research

We are a day late on the February report of New Academic Research. 

1. Santa Clara's Computer and High Tech Law Journal has an excellent new article on by Christopher Holman proposing the use of the Protein Similarity Score for determining genuses of related protein sequences. Holman argues that the similarity score represents a more rational and scientifically based approach to claiming a genus of related proteins compared to the current practice based on percent identity.  21 Santa Clara Computer & High Tech. L.J. 55 (Download Article.pdf). Thanks to Trevor Dutcher, the Journal's Editor for providing a copy of the article.
2. Professor Katherine Strandburg has written an important article regarding the experimental use exception to patent infringement.  Her article, What Does The Public Get? Experimental Use And The Patent Bargain, is published at 2004 Wisconsin Law Review 82, and also available at SSRN.  Her article, that builds from principles of patent law, is cited in at least one of the briefs in the Merck v. Integra case, and may help shape the Supreme Court's decision.
3. Professor Eileen Kane's article on the patentability of Genes and DNA will become more important if the Supreme Court decides to take up the case of LabCorp v. Metabolite -- a case that may redefine concepts of patentable subject matter.  Kane argues that the genetic code "can be characterized as a law of nature."  If so, the legitimacy of genes as patentable subject matter is severely questioned. Available at SSRN, 71 Tennessee Law Review 707.
4. David Almeling is now a clerk at the 11th Circuit.  His recent article in the Stanford Technology Law Review discusses utility requirement issues of nanotechnology inventions.  Specifically, Almeling argues that nanotech should be measured under the same utility requirements as all other inventions. The article, Patenting Nanotechnology: Problems with the Utility Requirement is available here: http://stlr.stanford.edu/STLR/Articles/04_STLR_N1/contents_f.htm.

Each month I post a note discussing the academic side of patent law.  My on-line sources for material are the SSRN electronic library, a few hard copy journals, and several more that are freely available on-line.  Most of my material, however, comes from articles directly e-mailed to me from professors and law review editors.  Please feel free to e-mail articles for the March edition. (Include information on where the article is being published). -- DDC

USPTO: There's No Such Thing As A Free Priority Document

The USPTO has announced a proposed change to the rules in handling newly filed patent applications. According to the proposal, if an applicant does not pay the basic filing fee during pendency of the application, the PTO may burn (or otherwise dispose of) the application.  This means that you could no longer rely on that application as a priority document.

 

There will be no public hearing, but comments will be accepted by March 30, 2005 by Robert Bahr at AB69Comments@uspto.gov.

 

Link:

• Proposed change: